By Tiernan Ray

Here are some things going on this morning in your world of tech:

Cheers for Microsoft

Shares of Microsoft (MSFT) are up $1.11, or almost 4%, at $29.90, in early trading following the company’s report last night of fiscal Q3 revenue that slightly missed expectations but a higher-than-expected profit per share.

The bulls are out in force this morning cheering the results. Bernstein Research’s Mark Moerdler reiterates an Outperform rating on the shares, and raises his price target to $39 from $37, writing that all that matters is that data from last quarter show Microsoft is a cloud computing powerhouse: “We estimate that Microsoft is already the 2nd largest enterprise cloud vendor with a ~$1.4B to $1.6B enterprise revenue run rate.”

The Dell-IBM Connection

Shares of Dell (DELL) are down 46 cents, or 3%, at $13.48 after the company this morning confirmed that Blackstone Group (BX) has pulled its bid of $14.25 per share for the company after concluding the hurdles in the PC business were too great. According to the statement released by Dell, Blackstone told Dell that “a number of significant adverse issues have surfaced since we submitted our letter proposal to you on March 22nd, including: (1) an unprecedented 14 percent market decline in PC volume in the first quarter of 2013, its steepest drop in history, and inconsistent with Management’s projections for modest industry growth; and (2) the rapidly eroding financial profile of Dell.”

Blackstone notes that since it submitted the bid, “the company revised its operating income projections for the current year to $3.0 billion from $3.7 billion.”

Dell’s fortunes this morning may in some ways be tied to those of International Business Machines (IBM), which last night reported Q1 revenue and profit that missed expectations.

Stifel Nicolaus’s David Grossman this morning reiterates a Buy rating on the stock, while cutting estimates, noting “There was speculation in the market yesterday that IBM would be divesting its x-series servers to Lenovo. (0992HK) [which bought IBM's PC operation back in 2005] Management declined to comment on this topic, but it would be consistent with their ongoing efforts to divest commodity businesses.”

Indeed, the Financial Times’s Tim Bradshaw and David Gelleswrote late yesterday that “Sources said that its commodity “x86” server business, which accounts for about a third of its server revenues but contributes little profit, could fetch a multibillion-dollar price tag if sold, with Lenovo in the frame as the most probable buyer, alongside another possible bidder.”

Wells Fargo’s Maynard Um, reflecting on that speculation, argues that putting IBM’s server business in play “would likely have been another key issue” for Blackstone in reconsidering its Dell bid. Um notes that Lenovo filed a “Clarification Announcement” indicating “preliminary negotiations with a third party” and “referred to ‘certain articles published in the internet in relation to a possible acquisition by the Company of certain computer server business’.”

Multiple expansion for Google?

Shares of Google (GOOG) are up $17.70, or 2.3%, at $783.97, following a report last night of Q1 revenue that was in line to slightly below consensus, and earnings per share that beat comfortably.

Price targets are going up this morning. Canaccord Genuity’s Michael Graham reiterates a Buy rating on the shares and raises his price target to $890 from $830, writing that not only do current estimates for this year and next look “achievable,” but also “Given the recent consistency of results, we also believe the multiple can expand somewhat and the stock can continue its more or less upward trajectory seen so far this year.”

More AAPL malaise

Apple (AAPL) shares are today marking new lows, down $2.65, or half a percent, at $389.40, amidst another slew of notes with mixed views.

Barclays Capital’s Ben Reitzes reiterates an Overweight rating, but cut his price target on the stock to $465 from $530, after cutting estimates based on an expectation of slowing demand for the iPhone, among other issues.

Reitzes thinks this coming Tuesday’s fiscal Q2 earnings report will be “uninspiring,” but that “the risk/reward actually looks favourable with below consensus figures if you take a longer-term view,” although he cautions that the bull case “assumes Apple does SOMETHING by September and lifts itself from an almost “frozen state” during the March quarter.”

And DigiTimes’s Max Wang and Joseph Tsaithis morning reiterate a warning of slowing iPad mini shipments, a claim the publication made on Wednesday, writing that “Shipments of iPad mini, mainly due to competition from several 7- to 8-inch tablets, are expected to drop from 13-15 million units in the first quarter of 2013 to 10-12 million units in the second,” citing unnamed sources in the electronics supply chain.

Speaking of Apple, in case you missed it, Nathaniel Popper and Nick Wingfieldthis morning pen a summary of Apple’s fall from grace in the stock market, noting that the stock is down to its lowest levels since founder Steve Jobs passed away in late 2011, while arguing “Apple is bigger and, by some measures, stronger today that it was then. It sells more iPhones and iPads than ever.”

The article quotes Bernstein Research’s Toni Sacconaghi and Piper Jaffray’s Gene Munster, the latter of whom remarks, “It’s like getting a beating every day coming into work,” Mr. Munster said. “Investors are so negative, they want to take it out on somebody. I feel like I end up being that guy.”

Add a Comment

We welcome thoughtful comments from readers. Please comply with our guidelines. Our blogs do not require the use of your real name.

Comment

There are 14 comments

APRIL 19, 2013 11:05 A.M.

Danny M. wrote:

TipRanks shows that Michael Graham of Cannacord Genuity has a 35% success rate on his Buy/Sell ratings. you're much better off flipping a coin. Also analyst Maynard UM achived a 47% success ratio since 2009. only one here that is worth listening too is Gene Munster. http://tipranks.com
know who you listen too...

APRIL 19, 2013 12:06 P.M.

Rich wrote:

Apple blows away estimates Tuesday and all the Moron Anaysts will need to eat crow with their estimates on Wednesday. Bunch of Idiots. This drop was planned and now that the calls down to 390 have been WIPED out, the funds and the brokers will drive thru the roof! Apple sees 550/600 next week.

APRIL 19, 2013 12:08 P.M.

Bob wrote:

All Google Shares are being sold and all money is being poured into Apple. See ya at 600 next week!

APRIL 19, 2013 12:47 P.M.

Paulo Lin wrote:

Appl up $3 after a week of major drops, I'm not sure all the damage is done since the earnings will be poor, I'm guessing under $380 next week after earnings are announced. Apple is weak with weak products and the only thing saving them is the lock down they have on tech challenged individuals with their manipulative "Ecosystem" crap. Whenever I walk in a carrier store, they bash the iphone, they all hate Apple. All you long losers think that because Apple is a cash cow and trading at low PE it's a sure bet. I bet that's what you thought when last earnings were out and apple dropped $50 to $550. Still more to come! Stay long and suffer.

APRIL 19, 2013 1:22 P.M.

Anonymous wrote:

@Paulo Lin. Carriers try not to push apple products because it costs the carrier the most to subsidize, not because its a poor product. It's the number one selling smartphone in the US for a reason. The stock is already priced in for a weak earnings report.

APRIL 19, 2013 2:36 P.M.

Anonymous wrote:

digittimes is such a quality source of news.

APRIL 19, 2013 3:05 P.M.

Ron wrote:

Tim Cook will be fired this weekend. Stock will surge Monday!

APRIL 19, 2013 3:32 P.M.

Ed wrote:

Google missed on revenue and only made EPS becuase of their tax rate went down 10% and they up up 5%. What a F JOKE!

APRIL 19, 2013 3:37 P.M.

Mary wrote:

Marissa Mayer will be the new Apple CEO next week.

APRIL 19, 2013 4:21 P.M.

Paulo Lin wrote:

@Anonymous, Yes that part is true, they make less with Apple products however all the salespeople, managers have Android products, Apple should keep doing what they are doing to the carriers this way they will turn more people against them and big Apple bully will disappear for good as they should have in the early 90s. BTW, Apple will be forced to be more competitive to stay in business and the profits will decrease and so will the shares. Only thing that is too bad is that I cashed out my short position at $550, didn't expect it to go lower than $500, too late now :-(

APRIL 19, 2013 6:16 P.M.

@bob wrote:

good one! been off the meds long?

APRIL 19, 2013 8:23 P.M.

Paulo Chen wrote:

@Paulo Lin so if, by a hint of luck, Apple manages to bounce back to $600 a share with an awesome new product, ... will you go chew on some Doo Doo?

APRIL 19, 2013 8:47 P.M.

Jake_in_Seoul wrote:

If Barrons insists on giving credit to DigiTomes rumors, it should also point out that the article doesn't speak neutrally of "competition" but rather spends half the article talking in fulsome terms about Samsung. I think any reader would wonder whether this effort was a "for-pay" effort. By reprinting such a dubious piece and making it seem less biased than it actually appears, Bartons may well be cooperating in a chain of corrupt practice seemingly aimed at market manipulation. Shame.

APRIL 20, 2013 11:27 A.M.

Paulo Lin wrote:

Do you really think the few people that actually read this will affect the shares? Just because your too hard headed to realize it's time to cash out, doesn't mean that the decrease is share prices are caused by Barron. Apple can afford to do what they've been doing in the past, alienating carriers, etc however now that their product is no longer #1, it's going to bite them back hard. Right now worldwide Apple controls 21% of the smartphone market with Android at 70%. Doesn't this tell you something? It's exactly what happened in the 80s to Apple with the Apple II+ and Macintosh, Steve Jobs hard headed, independent mentality came back to haunt him, HARD

About Tech Trader Daily

Tech Trader Daily is a blog on technology investing written by Barron’s veteran Tiernan Ray. The blog provides news, analysis and original reporting on events important to investors in software, hardware, the Internet, telecommunications and related fields. Comments and tips can be sent to: techtraderdaily@barrons.com.